Bush-Clinton Katrina Fund Roiled by Disputes Over Aid to Religious Groups

The head of the Bush-Clinton Katrina Fund resigned under pressure last month, shortly after seven prominent religious leaders stepped down from one of the charity’s advisory committees in anger over the nonprofit group’s activities. The religious leaders said that the fund’s staff had ignored their recommendations on how $20-million in aid should be distributed to churches in the region devastated by last year’s hurricane.

The fund, chaired by former Presidents Bush and Clinton, was created after Hurricane Katrina destroyed much of New Orleans and the surrounding area, and began operating in December. It has raised $129-million.

Mary Ann Wyrsch, executive director of the charity, said she was stepping down “in the best interests of the fund.”

She has been replaced by Constance Berry Newman, former assistant secretary of state for African affairs. Officials of the charity declined to comment on the change, beyond a formal statement thanking Ms. Wyrsch for her service.

Her resignation came less than a week after the co-chairmen of the fund’s Interfaith Advisory Committee, Bishop T.D. Jakes and the Rev. William H. Gray III, left the charity, accusing its staff members of undermining their efforts to make sure money from the fund went to deserving congregations and projects. Five other religious leaders on the nine-member committee joined Bishop Jakes and Mr. Gray in resigning shortly thereafter, and the committee’s staff — which was separate from the fund’s staff, headed by Ms. Wyrsch — also resigned.

Shunning Agreements

The heart of the dispute, according to Mr. Gray, a former Pennsylvania congressman and former chief executive of the United Negro College Fund, is that the staff members of the fund ignored a series of agreements with the committee about how money should be distributed.

“The whole situation was tantamount to a philanthropic version of FEMA,” he said, referring to the Federal Emergency Management Agency, which was widely criticized for its response to last fall’s hurricanes.

Mr. Gray said the committee had developed an extensive set of procedures through which congregations would apply for grants from the fund and the committee’s staff would make visits to the Gulf Coast region to verify that the religious groups were legitimate before any checks were sent out.

“Agreements were reached and then those agreements were changed by the fund staff,” he said. “The staff on their own sent out checks and did not follow up to make sure the churches were real.”

The money was distributed, Mr. Gray added, without committee members being told.

“The way we found out about this is a minister in Mississippi called her bishop, who sat on the committee, and said, I just got this check. When our staff people asked the Katrina Fund staff if they could have the information about what had been sent out and how the procedures were changed, they were told no, you can’t.”

He said that the fund’s staff members also ignored the committee’s recommendation that the maximum amount any congregation would be eligible to receive should be raised from $35,000 to $200,000. “The reason we were going to do more is that there were fewer applicants,” Mr. Gray said.

He added that the committee had taken its work very seriously, and had arranged a conference in New Orleans in November with 2,000 ministers from the area to find out what their needs were.

“The people on this committee all have extensive experience as members of the clergy,” he said. “I headed the United Negro College Fund. None of the people in the Washington office have been to this region, none has ever been involved in church work. Now they’re going to say they know better than Bill Gray does? Fine. I get off the wagon.”

In its formal statement, the Katrina Fund said it had distributed $65.2-million, or about half of its available money, to schools, state governments, community organizations, and religious groups, and planned to complete its work by the end of the year.

“For the sake of the churches and the vision shown by Presidents Bush and Clinton, I hope they get their act together,” said Mr. Gray. “These people have been down there waiting for help for over a year.”